Sunday, September 24, 2023

Judge Hands Federal Government Major Legal Defeat in Gulf of Mexico

 Judge Hands Federal Government Major Legal Defeat in Gulf of Mexico 

A federal judge struck down a Biden administration rule that would place significant restrictions on an offshore oil and gas lease sale, according to an order issued on Thursday.

In the Thursday evening ruling, Judge James Cain of the Western District of Louisiana ordered the Biden administration to expand its sale of the Gulf of Mexico oil leases later this month, according to multiple news reports. It came after the state of Louisiana, the American Petroleum Institute group, Chevron, and Shell filed a lawsuit to block the federal Bureau of Ocean Energy Management's restrictions on Lease Sale 261, a sale that is scheduled for next week.

The judge ruled that the sale must occur by Sept. 30 under its original conditions.

"The court observes that plaintiffs have demonstrated substantial potential costs resulting from the challenged provisions," Judge Cain wrote. "While the government defendants largely focus on the acreage withdrawal and dynamics of the sale itself, many of plaintiffs’ alleged hardships arise from the vessel restrictions."

Plaintiffs, he wrote, have demonstrated a " likelihood that these will burden their operations on current and planned leases," adding, "the resulting costs would not be undone by the court’s entry of a permanent injunction and order of another sale."

In a criticism of the Biden administration's rulemaking, he said it appeared to be "a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations." The judge wrote that federal officials, meanwhile, have attempted to "provide scientific justification to a political reassessment of offshore drilling" by issuing restrictions on the lease sale.

Federal officials in late August issued the restrictions in a bid to protect a Gulf of Mexico whale species after it came to a settlement with a coalition of environmental organizations. The Bureau of Ocean Energy Management issued a notice that had expanded protections for the Rice's whale, which is listed as an endangered species.

The new lease stipulations removed more than 6 million acres originally intended to be offered at the auction and require vessel operators to maintain a vigilant watch for the whales and abide by speed restrictions in the whale's habitat. The changes stem from an agreement earlier this month between federal agencies and environmental groups that sued in 2020 alleging the government did not provide adequate safeguards for the whales.

Following Judge Cain's ruling on Thursday, the American Petroleum Institute hailed the ruling, saying it was a positive step towards energy independence and security.

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"We are pleased that the court has hit the brakes on the Biden Administration’s ill-conceived effort to restrict American development of reliable, lower-carbon energy in the Gulf of Mexico," the group's general counsel, Ryan Meyers, said in a statement to Fox News.

Background Details

President Joe Biden paused federal drilling auctions right after taking office in January 2021 as part of his climate change agenda. However, the year-old Inflation Reduction Act requires that the government hold the Gulf of Mexico lease sale planned for late September 2023.

Days after the rule was issued, the aforementioned groups filed a lawsuit and argued that it would "restrict American energy access in the Gulf of Mexico."

"The recommended actions are not justified by existing data nor operational experience, would impose significant burdens on the men and women currently working in the region, and unfairly single out oil and gas traffic in an area that is one of the most used maritime areas in U.S. waters," the American Petroleum Institute said in a statement.

Their lawsuit had claimed the Biden administration’s actions violate provisions of a 2022 measure, labeled the Inflation Reduction Act, that provided broad incentives for clean energy, along with creating new drilling opportunities in the Gulf. They also said the changes after the initial lease sale was proposed in March violate federal law because they were adopted arbitrarily, without sufficient explanation of why they are needed.

Multiple environmental groups last month said they would attempt to block the lease sale entirely. In a news release, the organizations said that the lease sale violates the National Environmental Policy. Led by Earthjustice, the groups say the administration failed to account for health threats to Gulf Coast communities near oil refineries and didn’t adequately the alleged effects of new fossil fuel development on the climate.

In the release, issued in late August, Earthjustice said that the federal government's restrictions don't go far enough.

“We’re pleased that Interior excluded habitat for the nearly extinct Gulf of Mexico whale from this lease sale, but it’s equally critical that Interior builds on this step and protects climate and Gulf communities from the harms of leasing," the San Francisco-based organization said.

A spokesperson for Earthjustice told Bloomberg on Thursday that it is considering an appeal of Judge Cain's ruling. The lease sale would further threaten the Rice's whale species, the spokesperson added.

Reuters and The Associated Press contributed to this report.

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